It’s been a hot summer here in India. During May, Delhi recorded its highest temperature on record (at 49.9 degrees celsius). And a study that analysed 65 cities found that 85% of them experienced an increase in heat stress this year.
The result was higher usage of air-conditioners and coolers, leading to a 15% rise in power consumption in May, at 156.31 billion units, compared with a year ago.
Owing to high economic growth and climate change, India’s energy consumption is estimated to double by 2050. Peak demand, which is at 235 gigawatt (GW) today, is expected to reach 350 GW by 2030.
The good news is that India has been building its capacities for renewable energy at a feverish pace. The country aims to become energy independent by 2047, and it plans to achieve that by relying on renewable energy and cleaner technologies, such as green hydrogen.
Focus on renewables
In under a decade, India’s installed non-fossil fuel capacity has increased by 396%, and is currently at over 203 GW (which includes hydro and nuclear power). By 2030, India’s goal is to achieve 500 GW of fossil fuel-free generating capacity.
In order to meet this target, India will have to set up ’35 to 45 GW of renewable energy capacity each year’, says Vibhuti Garg, director for South Asia at the Institute for Energy Economics and Financial Analysis. For green hydrogen, India needs to add another 25 GW to that number.
Green hydrogen is being viewed as a promising alternative for enabling energy transition
Green hydrogen is a technology that generates hydrogen (a light and highly reactive fuel) through a chemical process known as electrolysis. India announced its green hydrogen mission in 2022, which aims to make the country a leading global producer and supplier. Green hydrogen is viewed as a promising alternative for enabling energy transition, as it can be utilised for long-duration storage of renewable energy.
Storage issues
To deal with storage issues around solar and wind energy, India is embracing advanced chemistry cells, such as lithium iron battery, and has announced a US$2.5bn production-linked incentive scheme for enhancing its manufacturing capabilities; so far, the government has received bids from seven companies to set up battery plants.
For hydropower, India is focusing on pumped storage hydropower (PSH) – a type of hydroelectric energy storage that uses two water reservoirs at different elevations to store and generate electricity. According to reports, two of India’s largest business houses – Reliance Industries and the Adani Group – plan to invest billions of dollars in PSH projects.
Coal-based power plants currently account for over 70% of the power generation
With the big players making major investments, the commercial viability of such power plants may improve. Several challenges remain, however. These include access to capital, drawing foreign investment into the sector, and the availability of technology from developed countries. On top of that, India must also modernise its grid in order to integrate renewables.
Ambitious targets
Given India’s strong focus on renewables and rising demand, it may seem that the country could meet its additional energy demands through green sources. But there’s some way to go.
India’s imports of coal are rising by 7.7% per annum. Solar and wind energy account for less than 10% of India’s energy generation mix. If we add hydropower, the contribution of renewable energy rises to around 20%. Coal-based power plants currently account for over 70% of power generation.
Even if India manages to add another 300 MW (megawatt) of renewable capacity by 2030, its energy mix will still favour thermal power. Given the unstable nature of renewable energy, ‘thermal energy will remain the baseload for India’, says Ajay Jain, managing partner at Indusbridge Capital, which is setting up a sustainable energy investment platform in India. The increased demand for electricity will be met through ‘a mix of several sources of energy, including thermal’, he adds.
The focus on renewables and aggressive policies for energy transition will eventually take India towards its environment-friendly goals. The target dates, though, may have to be reset.
